CARES Act 2020
April 13, 2020
The CARES Act provides added relief for retirement 457 plan participants.
Congress recently passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide expanded access to retirement plan accounts for distributions for many Americans during this unprecedented time.
While taking money from your retirement account early should be a last resort, we understand that sometimes unusual times call for unusual actions.
To help, your plan has adopted the following provision.
CARES Act relief applies to participants who:
- Have been diagnosed with COVID-19 by a test approved by the Centers for Disease Control and Prevention.
- Have a spouse or dependent who has been diagnosed.
- Are experiencing adverse financial consequences due to being furloughed, quarantined or laid off; having their paid work hours reduced; being unable to work due to lack of childcare, or having to close or scale back a business due to coronavirus.
The 10% IRS tax on pre-age-59½ early withdrawals (if applicable) is waived for coronavirus-related distributions of up to $100,000 through December 2020. These withdrawals are taxable as income, but the tax can be spread over three years, and the participant can elect to repay it within three years. Additionally, the 20% standard income tax withholding at the time of distribution is not required.
To apply for a coronavirus-related withdrawal, log in to your account online, click on the plan name and select Plan forms to access the request form.
While we encourage you to stay the course, remain invested and continue to save, we understand this is a challenging time. Before making decisions about taking money out of your retirement savings, please discuss your options with a tax professional.
For more details or if you have questions, visit wrsdcp.com or call 800-701-8255.
Securities offered and/or distributed by GWFS Equities, Inc., Member FINRA/SIPC. GWFS is an affiliate of Empower Retirement, LLC; Great-West Funds, Inc.; and registered investment adviser, Advised Assets Group, LLC. Investing involves risk, including possible loss of principal. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice.
©2020 Empower Retirement, LLC. All rights reserved.